Fiat ends distribution agreement with Tata Motors

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Last Updated: Wed, Apr 10, 2013 15:40 hrs

New Delhi, April 10 (IANS) To further develop its brand in India, Italian automobile major Fiat's Indian subsidiary Wednesday said it has dissolved an agreement with its manufacturing partner Tata Motors for distributing Fiat passenger vehicles sold here.

"The objective behind establishing the National Sales Company (NSC) in Fiat Group Automobiles India (FGAIPL) is to consolidate our position as a key automobile player in the Indian car market," Enrico Atanasio, director of FGAIPL, said.

The move will provide Fiat cars with exclusive showroom space. At present, Tata and Fiat cars are sold through the same dealership.

In May last year, the Italian automobile manufacturer formed a new company to handle distribution and service activities of its Indian subsidiary by opening new stand-alone dealerships, repair and service centres across major Indian cities.

The company had plans to open 80 dealerships in the country by the end of 2012. Around 25 were expected to come up in north and east India, a similar number in the western region and 30 in southern region.

Fiat and Tata Motors had formed the joint venture (JV) in 2006 under which Tatas were managing distribution and servicing of Fiat cars in India through joint dealerships.

However, even after the dissolution of the distribution agreement, the JV's manufacturing activities and assets will continue in the same manner. The JV has a manufacturing plant in Ranjangaon, Maharashtra, which produces cars and powertrain engines for both Tata Motors and Fiat.